Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.
Under trade pressure from the United States and the EU, China has in the last year made all sorts of noises about opening up its economy to foreign investment. This has led many to believe that China will actually open up its economy and this in turn has caused many companies to write our China lawyers for legal assistance on this front. This also has caused many to write us to complain about our “ignoring” these “major changes” and to accuse us of “bias” or “never wanting to give China a break.” The usual question is something like, what is this opening up going to mean for foreign investment in China.
Our short answer is that we are skeptical that there will be much in the way of favorable change and we will believe it when we see it. Truth is that China is notorious for the legal equivalent of vaporware and these announcements could very well turn out to be exactly that. China could be floating these changes as trade negotiation carrots, to be pulled back depending on what happens on the trade front. Yes, some of this is has already become law and more of it is set to become law relatively soon. But again, we will believe it when we see it and not before. Trust us when we say that much law that is promised never actually becomes law (how many times has China pushed back its laws opening up its financial sector?) and much that does become official law is pretty much completely ignored — like SaaS and ICP licenses. See Selling SaaS in China: Resistance is Futile.
Heck, if we wrote just once a month about each Chinese legal rumor or even promise or statement, we probably would not have time to write about anything else. So until we see real change in China’s foreign investment laws and in the on the ground realities, we do not expect to have much to say.